Veriton Investment

China Bond Flow Data Suspended After Market Selloff Deepens

(Bloomberg) -- A popular Chinese financial data provider has halted releasing figures tracking local bond flows, according to some of the firm’s clients, as a rally in the country’s stock market fuels a selloff in sovereign debt.

Shanghai Tiantian Fund Sales Corp., which runs a data platform targeting China’s asset management firms, didn’t publish daily funds-related figures including investors’ redemptions of fixed-income funds on Thursday, said the clients, who requested anonymity discussing private matters.

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The bond flow data are closely followed by traders as a gauge of sentiment in the world’s second-biggest debt market.

Shanghai Tiantian didn’t immediately respond to a request for comment.

The data suspension has come as a rout in Chinese government bonds deepens, with yields on the 30-year paper climbing to a level unseen since November. The selloff has resulted from a bull run in China’s stock market, the resumption of a value-added tax on certain bond investments and a proposed overhaul of mutual fund fees.

The incident is reminiscent of an episode two years ago, when investors in China suffered an abrupt but brief suspension of widely used bond price feeds that raised concern about sudden regulatory policy shifts.

Chinese bonds have been on a roller-coaster ride in the past year. A massive rally initially sent yields to a record low in January, driven by expectations of stepped-up monetary easing as deflation persisted. But as a local stock rally extended in recent months, the debt market has come under increased pressure.

In both cases, Chinese regulators, especially the central bank, have used tactics ranging from verbal warnings to liquidity operations to rein in what they see as excessive price swings that threaten economic management.

--With assistance from Tian Chen and Zheng Li.

(Updates with background and details of recent bond market moves)